A Game Theory View of Family Law: Divorce Planning for a 500% 'Family-Tax'

Abstract

Divorces involve money, which can prompt fierce legal battles. These include family obligations for child support, alimony, and property division. Small income changes can have huge consequences. For example, a $1,000 income increase can result in $5,000 of increased family obligations. A $10,000 increase can produce $50,000 of obligations. Or a $10,000 decrease can result in $50,000 of reduced obligations. Tax, estate, and bankruptcy law fundamentally deal with income, deductions, assets, and liabilities: what they are and when they are. So does accounting. Family law—so far as it covers who gets what—focuses on the same things. Thus, tax and accounting skills transfer seamlessly to family law. Hence, this article covers tax rates and margins, family law rates and margins, and reality versus perceptions involving "family tax" rate.

Keywords: family law, game theory, tax, divorce, divorce planning, child support, alimony, property division